Many people were going through a very difficult time in life and hardly survived because of being chased for debts by informal creditors. Anyway, after being debt-free, why do some people fall into the trap of debt again? Which way can we help people stay out of debt forever? Here, we have some solutions to keep yourself out of debt. If you can make it, you may have some savings left to spend and live sustainably for the rest of your life.

1. Record income expenses to update your current financial status

• Check how much income you own a month and where you can find extra income.
• Check how much expenses you spend a month. What type of expense do you have? What is the regular expense and what is an unnecessary expense that you can cut or reduce.
  

2.Set a big goal to strive for your achievement

A goal is a compass to determine the direction of your financial plan. For example, you may set a big goal to save 10 million baht for spending during the retirement age. Apart from that, you should also set a timeline for your goal to motivate yourself in achieving it in each period of time. You’d better start saving with a small amount of money as it won’t take long to accomplish it, and then you’ll be inspired to save a higher amount of money next; for instance.

• A short-term goal within 3 months, such as savings for investment.
• A short-term goal within 2 years, such as emergency savings to spending in urgent need. Generally, the amount of your emergency savings should be equal to your 6-month expenses.
• A medium-term goal within 10 years, such as savings for a down payment of a house or condominium.
• A long-term goal from over 10 years, such as a sum of savings for the retirement period.

3. Change your mindset, learn to save before spending

It sounds easy but may be challenging for some people. If you’ve never saved money, we recommend that you do an automatic monthly deduction from your savings account and then transfer that money to the fixed account to protect you from unintended spending before saving. 

4.Reduce unnecessary expenditure

Recording income expenses helps to disclose your spending behavior each month and realizing if you can reduce or refuse to buy unnecessary or luxurious stuff that won’t bother your quality of life. For example, instead of eating out regularly, you may sometimes buy a ‘quick and easy meal and eat at home to save money, or you can cook large amounts of food and freeze them for future meals. For clothes, cosmetics and accessories, you don’t need to buy new ones if the current ones are still in good condition

5. Change your behavior, make friends with those who have financial equality

Some people think that friendship has nothing to do with financial matters as it’s all about the mind. In fact, friends have the greatest influence on your lifestyle and decision. For example, if your friends love a party in a lavish café, you’ll certainly treat yourself in that place. Or, if your close friends buy brand-name bags, that’ll be a factor to influence your decision to buy a bag. You probably never perceived that friends can stimulate your behavior. 

6. Study about investment wisely

Even though you’re good at saving money, you may never succeed in arranging a financial plan if you don’t know about investment. Presently, savings or fixed account interest don’t outweigh the inflation rate which is approximately 3% per year. Therefore, you should explore investment knowledge to beat the inflation rate and invest wisely to achieve your financial goals.

After all, if you don’t want to return to the debt crisis, start recording your income expenses from now to monitor your spending behavior and set big goals for your accomplishment. Saving before spending, adjust your money mindset, and keep learning about investment, and then you’ll live a happier life and your financial success will not be out of reach.

Reference

https://www.bot.or.th/Thai/ResearchAndPublications/articles/Pages/Article_2May2021.aspx?fbclid=IwAR0L6gFU_wAbHk1s7OvvPu7pvYQ6GGRE540qAcAyVjm84BE-9V5OIwTUnKM